Net income from financial operations of banks operating in
Finland increased, but operating profit decreased in the second
quarter of 2018

In the second quarter of 2018, the net income
from financial operations of credit institutions engaged in banking
in Finland amounted to EUR 630 million and their operating profit
to EUR 313 million. Compared to the corresponding quarter of the
previous year, net income from financial operations increased by
EUR nine million and operating profit decreased by EUR 118 million.
These data derive from Statistics Finland’s financial
statement statistics on credit institutions.

Net income from financial operations and operating
profit of banks operating in Finland, 2nd quarter 2005 to 2018, EUR
million

Interest income and expenses

In the second quarter of 2018, credit institutions engaged in
banking in Finland accumulated EUR 1.1 billion in interest income
and EUR 519 million in interest expenses. The net income from
financial operations calculated as the difference between these was
EUR 630 million. Compared to the corresponding quarter of the year
before, the net income from financial operations increased by EUR
nine million, that is, around 1.5 per cent. Due to the renewed
FINREP reporting practices of credit institutions, the net income
from financial operations is not, however, in all respects fully
comparable between 2018 and previous years.

Administrative expenses

Administrative expenses are the single largest expenditure item
of banks operating in Finland. In the second quarter, banks had EUR
769 million in administrative expenses, which was EUR 43 million
more than in the year before. Wages and salaries represented 43.1
per cent of administrative expenses. Compared to the second quarter
of 2017, total wages and salaries decreased by EUR 11 million to
EUR 331 million.

Operating profit

The operating profit, or profit from continuing operations
before taxes, was EUR 313 million. Compared to the second quarter
of the previous year the operating profit diminished by EUR 118
million. Due to the renewed FINREP reporting practices of credit
institutions, the operating profit is not, however, in all respects
fully comparable between 2018 and previous years.

Balance sheet

The aggregate value of the balance sheets was EUR 364 billion.
The balance sheet was 1.2 per cent higher than one year ago. The
share of own equity in the total of the balance sheets was 4.1 per
cent or around EUR 15 billion. Compared to the corresponding
quarter of the previous year, banks’ own equity declined by
EUR 1.8 billion. Due to the renewed FINREP reporting practices of
credit institutions, the balance sheet items are not, however, in
all respects fully comparable between 2018 and previous years.

A company restructuring made in the Finnish banking sector in
the first quarter of 2018 explains part of the unexceptionally
large changes in the profit and loss account and balance sheets
and, in particular, in equity.